The two associations call for financial services and, more specifically, insurance to be included in the scope of the trade partnership.
The inclusion of regulatory issues is welcomed, with the associations requesting that the partnership agenda does not duplicate the insurance dialogues currently being conducted between the EU and US but rather provides political support for them.
However, as recognised by the High Level Working Group (HLWG) in its final report, more can still be done to “strengthen the contribution of trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness". ACLI and Insurance Europe agree and believe it to be especially true of the insurance sector, which would significantly gain from inclusion in a TTIP.
In its final report the HLWG suggested that negotiations on a comprehensive trade and investment agreement should aim to achieve ambitious outcomes in three broad areas:
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Market Access
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Regulatory issues and non-tariff barriers; and
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Rules, principles, and new modes of cooperation to address shared global trade challenges and opportunities
Insurance is a highly regulated sector. Therefore, although ACLI and Insurance Europe see benefits stemming from enhanced market access and establishment of rules, principles, and new modes of cooperation to address global challenges and opportunities, ACLI and Insurance Europe believe the greatest benefits for insurance industry will come from addressing regulatory issues.
A practical example of where this would be beneficial can be seen in the area of group supervision. Many European and American insurers have a significant amount of their premium originating from the other side of the Atlantic, which is either transacted on a cross border basis, or through establishing branches or subsidiaries. The companies conducting these business transactions increasingly find themselves subject to duplicative regulatory requests; with supervisors, including those only supervising solo entities, wanting to gain a more holistic view of an entire insurance groups operation. We would therefore, like to see greater cooperation and coordination between the supervisors involved and, ultimately, recognition of robust supervision conducted elsewhere.
ACLI and Insurance Europe recognise that this will require an innovative approach with both sides needing to be creative, flexible and open-minded in developing negotiating solutions which respond to the specific characteristics of our industry. To these ends ACLI and Insurance Europe are very supportive of the insurance dialogues currently being conducted between the EU-US and the publication of a Technical Report summarising the output of their dialogues in December 2012. Publication of the report signifies the end of Phase I of this exercise. Phase II which has now commenced is intended “to lead to policy decisions by the respective organisations, regarding whether and how to achieve further harmonisation in regulation and supervision”.
In conclusion, ACLI and Insurance Europe believe that the goal of the insurance industry – to protect policyholders from risks while ensuring financial security – is consistent with the stated goals of the US and EU leadership when it formed the HLWG. Insurance is a fundamental ingredient for creating a robust and seamless economy that can sustain growth and job creation on both sides of the Atlantic. As such ACLI and Insurance Europe hope that financial services and specifically insurance will be viewed as a key component of the TTIP.
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